Trump has implemented his Tarrif war with Canada and Mexico by slamming a 25% Tarrif on goods and commodities imported from both countries.
The Mexican and Canadian governments have stated they will reciprocate in kind despite Trump’s earlier threat to double the Tarrif if they dare do same on US goods.
That means for every reciprocal action taken by both Canada and Mexico, the US government will double the Tarrif by an additional 25%.
Trump has also noted that he will impose Tarrifs on European goods and that of Chinese exports to the US. For China, Trump is slapping a 10% Tarrif on all imported goods and has effectively placed a ban on Chinese chip imports. The craziest Tarrif so far is the 100% Tarrif placed on Chinese EVs. This appears to be a protectionist move to shield Tesla from better and cheaper Chinese EV brands notably from BYD.
Trump is also hinting on not only banning China’s disruptive DeepSeek AI that has outperformed Chatgpt and other US AI machines at a miniscule fraction of what it took to create and maintain the US versions. To make matters worse , DeepSeek is being offered for free and is open sourced. The fallout of this was felt in the Nasdaq tech sector with NVIDIA crashing as much as 17% following the release of DeepSeek. From all indications, China’s tech sector is in the verge of retiring Silicon Valley .
But what does all these portend for the global economy ?
As Trump begins his protectionist economic model in a bid to kick start and boost American domestic industrialization, China, will seek for other markets outside the US (China’s major trading partner) to offload their finished goods.
Trump understands the vulnerability of the Chinese economy that has become too reliant on exports to the US and he is h*ll bent to cause panic for China. Most American brands will need to return back to the US but no matter the Tarrif on China made goods, the likes of Apple can not produce their overpriced iPhones (which cost just $30 to make in China) in the US at the same cost it will be done in China. That means , American brand products built in China will become more expensive if their factories are relocated to the US. This is a price Trump says it’s worth to bear in order to put road bumps to China’s skyrocketing economy. Trump knows that China without the US is fcked. China needs to create 3 million jobs every year for its teeming population or else unemployment levels will become unbearable. Without the US, China will have to look at other emerging markets notably , Africa and South America. So with this in mind , China will begin to aggressively push for an alternative BRICs currency outside the USD which most South American and African nations have shown readiness to adopt.
The goal of Trump’s trade wars is to bring back American industries. This is a wise move as the world is becoming weary of the USD global hegemony and the US using sanctions and seizing assets of countries who go against that hegemon. The case of Syria is one of such prime cases on how the US used sanctions so effectively to bankrupt that nation and went as far as occupying it to steal it’s oil and deny Syria its most fertile and productive regions. The gangup against Russia and brazen theft of their foreign reserves held in Western banks totalling up to $300bn has made many nations to question holding their reserves in western banks and in USD. This led to acceleration and acceptance of BRICs by many nations.
So what will a BRICs parallel economy look like?.
For one, every prices will be much more stable and cheeper without the gambling dens of London and New York speculators. Finished goods from China will be much cheaper and countries under the BRIC sphere will get more value for their resources than they did under the US dollar hegemon.
In a nut shell, Trump’s Tarrif wars will accelerate the dearth of the USD as a global currency and will lead to the removal of the unwanted middle men in New York and London who fed fat from the fiat Ponzi scheme .
